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Called to Account: There’s always a way out for banks

Banks dealt us a sharp reminder that they have plenty of tricks up their
sleeves when conditions turn against them.

The Bank of Ireland has been heavily criticised for its decision to raise
rates for thousands of borrowers who thought their deal was guaranteed to
track Bank rate.

Most of the borrowers reverted to the rate at the end of a deal. It was
effectively a standard variable rate (SVR). Last year it raised its SVR not
pegged to Bank rate by a similar margin, hitting 100,000 borrowers.

However, while most SVRs can be changed at any time, the 13,500 borrowers hit
this time around were given the additional protection that their rate would
rise only if the Bank of England increased its official rate. The prospect
of a Bank rise in the near future looks increasingly unlikely, as we report
this week, which clearly prompted the Bank of Ireland